Seller financing question

[Brandon Sizemore]

My grandmother seller financed her house to a woman for $650 a month for 20 years. The woman lived in it for a couple years and moved out and let her sister move in. They filed to get section 8 housing assistance and my grandmother signed for it. My question is was anything dealing with section 8 a violation of the contract or do I need to find out more specifics of the contract? It seems shady to me that she moved out and moved her sister with section 8 housing in but I didn't know if there was anything wrong with that or not.

[Patti Robertson]

If your grandmother sold them the home, why shouldn't they be able to rent it out?  She is simply the mortgage holder now.  Bank of America doesn't tell me if I can or can't rent my property, and neither should she be able to. SEC 8 just requires the Payee to be able to trace the name on the tax record back to the Payee.  They could have submitted the land contract along with the tax record to allow this trace of entity, just like I would if I submitted a property management agreement for a property I mangaged that was owned by someone else.  There is nothing fishy or illegal about this the ability to rent it.

Now what is fishy is that you said she is renting to her sister. The contract with HUD does not allow a Payee to rent to a relative, which may be why they wanted your Grandmother to sign it. But if your Grandmother signed it, she should be the payee. My guess is they provided their own bank account information, instead of your Grams, but then again, Gram doesn't own the house. If your Gram is getting the payments, this transaction would be legal. If the owner is getting paid to rent to her sister, it would be a violation of the HUD contract. It sounds like your Gram may have committed fraud when signing the HUD contract though, even if inadvertent, so I'd be careful about blowing the whistle until you read through the details of the HAP agreement to see what she actually signed. Here's a link to the contract she would have signed. https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_11737.pdf